.... where you lost a trade, your stop loss didn't hold and the loss became larger then planned (no this is not a cry post). My Problem is not the loss but since then I the net trades you do not have the guts to enter a position, only to find hindsight they would have done well. how do you find your confidence again? walk away for a week?
Welcome, welcome! You will be right but you will be trading small size and make little gains, then you will size up, you will be wrong and you will lose. You'll feel the pain of being wrong and losing money, so you'll be hesitant to take the next trade, and of course, it would have worked out. You take profits quickly, the trade continues running. You hold in hopes of a bigger gain, the trade goes your way, you have nice UPNL and then it reverses and stops you out at a loss. That's trading for you. This is what makes it hard. That's why you need to develop a process, mindset and intuition which takes years. There's no way around it and there is no shortcuts. It's not what a junior would like to hear, but that's how it is. There is no simple solution.
Yeah that's a good advice. You need to keep a journal and be aware of your mistakes and senses. So next time when you see a good setup and you want to enter, but are fearful, your conscious brain is supposed to be aware of your feelings and emotions + you know what your common mistakes are AND you make a rational decision to take the trade. You also need to train your mind that it's about probabilities and not about being right or wrong. It's counter-intuitive by default. The result of the individual trade should not matter to you.
If your strategy has any discretionary elements to it and you do not have enough historical data to show that the strategy has positive expectancy, then it would be hard to gain any kind of confidence after losses. My suggestion is to fully mechanized the strategy, keep trading until you have 100 data points to show how the strategy performs (forward test in live or demo)
Whenever I take hits and am feeling uncertain, I scale back significantly. Sometimes it's about trading just 100 shares to get it in motion. Do that until you don't care too much about the result. As mentioned, journal the process and continue to identify high probability trades.
Each trade should be treated equally as any other trade. Ever hear of risk management? If you only risk 2% per trade then, on a worst case scenario and even assuming a stock gaps down against you, should not matter. The most you can lose is 2% most days. A lot of times, you will lose 0.5%-1%. Once, in a while, you get a gap down and suffer a larger loss but, that is part of your risk management. As long as you take care of your losses, the profits will take care of themselves. Then, you move on the next trade which could be a big winner which wipes out all your smaller losses.
If you're setting your stops and the markets moved right thru them... It's an issue you need to talk to your broker to find out what's going on with your stop loss protection. Yet, if the problem continues...time to find a new broker. wrbtrader